With the Super Bowl Done, the NIKE-NFL Era Begins
Football is over. The Giants won the Super Bowl, and there is nothing to be excited about until at least the NFL Draft, if not August when preseason practices start again... right?
Well... maybe not.
As I wrote on Aug. 16, 2011 that the coming calendar year will be one of change in the NFL, specifically because their ten-year contract with Reebok comes to an end. A number of companies will step into the mix with the biggest cash cow in professional sports, including New Era for hats, but no company stands to make a bigger dent in how the NFL product is viewed than NIKE.
How does NIKE stand to impact the NFL?
When NIKE took the NFL deal away from Reebok, The New York Times reported that “nearly half of the NFL’s income from licensed goods comes from apparel and headwear,” according to Ira Mayer, the editor of The Licensing Letter. The league makes more money from t-shirts, shorts, hats and jerseys than they do from the sales of video games, trading cards, and every other novelty item.
A couple weeks ago, Nike started making their mark on NFL merchandise when they unveiled their new Vapor Jet Gloves for the Pro Bowl. As you can see from the images, these gloves are ridiculous, and the demand for them is already high. The gloves were on display again yesterday during the Super Bowl.
Back in August when I first wrote about NIKE, I spoke a bit about the NFL deal's impact on investors. At that time, NIKE (NYSE: NKE) was trading near its all-time high in spite of the NFL and NBA both dealing with labor issues; on the day I published that article, NIKE closed at $83.22 per share.
In early trading today, Feb. 6, 2012, NIKE is trading around $103 per share, or approximately 24 percent higher than its price when I noted that it might be a strong play. In spite of the stock continuing to establish all-time highs, analysts across the board consider it to be worth buying and holding long-term.
With other innovations hitting the market, such as the Nike FuelBand, the company continues to lead the way in the sports market. Where they take NFL apparel, specifically the game jerseys, is something fans will have to wait to see, but this will be a fascinating fashion year for football fans.
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